The DH has confirmed that practices in NHS-owned premises face rent and service charge rises to bring them in line with market rates.

In a letter to NHS Property Services, which took over management of NHS-owned GP premises in April, the DH said: 'In many cases, the current charges for occupancy did not reflect the full costs of providing the accommodation, and in some cases, the charges are minimal, or there are no charges.'

The letter added that providers would 'move to full cost recovery rentals as soon as practical during 2013/14 and 2014/15'.

Experts believe rent rises are likely to be reimbursed, and the DH letter says it will be a 'priority' to ensure they have no 'unintended consequences'.

But in motions put forward for this month's UK LMCs conference, GPs warned that 'exorbitant' hikes in service charges, which are not reimbursable, will severely affect patient care and practices' viability.

Northumberland LMC secretary Dr Jane Lothian said her 19,500-patient practice may close one of three sites because its service charges are to double. 'It's another pressure on decreasing finances,' she said.

Across her LMC area, practices are facing service charge increases of up to 500%.

'In one practice with 10,000 patients, they are going up by £30,000 to £40,000 a year,' she said.

'It is equivalent to a practice nurse. Most well-run practices are efficient and can't make savings overnight. The only option will be to cut staff.'

In south Tyneside, there is a £5m annual shortfall in recouped service charges across about 30 practices in NHS-owned premises, Gateshead LMC secretary Dr Ken Megson said. Some practices currently paying £10,000 a year will see their service charges increase to £50,000.

'We expect some rises but they have to be fair and over two or three years, so practices can adjust,' Dr Megson said. 'We can't put up our prices.

'We have told them all not to pay it. Until you sign a new lease, new charges can't apply.'

Earlier this year, some practices were sent service charge invoices for up to £100,000 as PCTs sought to balance their books before being abolished in April (GP, 21 January).